With more climate-change activists and environmentalists ringing the alarm about the danger Bitcoin mining poses to the environment, China is now auditing data centers to gain a better understanding of how the practice is impacting the country’s energy consumption.
The Beijing Municipal Bureau of Economy and Information Technology sent data center operators an “emergency notice” requesting a report on their involvement in Bitcoin mining and that of other cryptocurrencies, according to Reuters.
If centers are involved in the practice, the notice instructs them to report the amount, share and power the cryptocurrency mining is utilizing, according to an unnamed bureau official who spoke to Reuters on condition of anonymity. The probe was initiated by city officials into three of China’s biggest telecom operators.
The process of Bitcoin and cryptocurrency mining involves miners solving mathematical problems using specialized computers. The puzzles are solved approximately every 10 minutes and miners are rewarded with Bitcoin. Then the process continually repeats itself with new puzzles.
Studies and environmental activists have said that the profession of Bitcoin mining rivals the energy consumption of small countries like Sri Lanka and major U.S. cities like Las Vegas.
“A new study found that the cryptocurrency Bitcoin requires a lot of electricity, leaving a significant carbon footprint — one that rivals the environmental impact of Las Vegas or a small country like Sri Lanka. Each year, Bitcoin generates about 22 megatons in CO2 emissions, the researchers estimate,” CNN reported.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin
Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
According to the Bitcoin Electricity Consumption Index, Bitcoin mining consumes nearly 124 terawatt-hours per year. Microsoft founder Bill Gates is among those who have criticized mining the cryptocurrency.
“Bitcoin uses more electricity per transaction than any other method known to mankind,” Gates told the New York Times, adding that Bitcoin is “not a big climate thing.”
Chinese regions including Inner Mongolia, Sichuan, Yunnan and Xinjiang are attractive Bitcoin mining spots due to low electricity prices, though Beijing is not seen as a major cryptocurrency mining centre, Reuters reported.
While there is still much to be studied about Bitcoin mining, one existing study’s author, Christian Stoll, said discussions about regulating the profession should be on the table.
“Naturally there are bigger factors contributing to climate change. However, the carbon footprint is big enough to make it worth discussing the possibility of regulating cryptocurrency mining in regions where power generation is especially carbon-intensive,” Stoll said.
